Just something to read as post-factum - US Dollar strength forecasted to take global forex markets into the weekend
The US dollar (Currency:USD) is the driving force on global markets
on Friday afternoon in London. A look at the spot markets shows:
Just something to read during the weekend
Oil rose to the highest level since January amid concerns about a possible escalation in Syria's civil war.
oil for July delivery rose $1.16 to close at $97.85 a barrel on the New
York Mercantile Exchange. Oil finished the week with a gain of $1.82 a
barrel, or 1.9 percent.
Oil's closing price was the highest since Jan. 30. But U.S. stock
markets fell following lackluster reports on consumer confidence and
industrial production. Among other commodities, gold and silver rose,
while the prices for industrial metals dropped.
Drivers head into
the weekend paying around the same for gas as they did a week ago. The
national average of $3.625 is about 9 cents higher than at this time
2. Metals rise broadly; crude oil near high for year
Gold for August delivery rose $9.80 to $1,387.60 an ounce. Silver for
July delivery rose 37.1 cents to $21.954 an ounce. July copper rose 1.65
cents to $3.2015 a pound. July platinum rose 30 cents to $1,447.40 an
ounce and September palladium rose 65 cents to $731.70 an ounce.
Forbes: Can The World Afford Higher Interest Rates?
What explains the tumultuous market action of the past
week? Put simply, there have been escalating fears that U.S. Federal
Reserve will cut back on its US$85bn a month stimulus program. This has
led to rising U.S. bond yields over the past month, thereby putting
upward pressure on yields around the world.
Cutting back on QE would mean reducing the printed money
that the Fed has been using to buy bonds. That would result in less
liquidity, less money in the financial system. The printed money has
helped support asset prices, particularly stock and bond markets. Less
liquidity would reduce this support.
And just to continuing with this subject - from Forbes too : Jeff Gundlach: 3 Reasons Interest Rates Won't Head Much Higher
Reason #1: Global Growth is Slowing
Bond rates generally rise when growth is rising, causing
inflation expectations to pick up and investors to demand a higher rate
of return to compensate.
Reason #2: Inflation Expectations are falling again
To see what the market’s future inflation expectations are,
traders often look at the 10 year breakeven rate, which subtracts the
yield on a 10 year TIPS from the yield on a 10 year Treasury note.
Reason #3: The Fed is Not Going to Let Interest Rates Rise Much Higher
One of the biggest reasons the many have turned more optimistic about
the US economy is that the housing market, which was at the center of
the financial crisis, has started to turn around. One of the primary
reasons why is that interest rates on mortgages have been at very low
levels, making houses much more affordable for the average buyer
It may be interesting for the traders who are trading USDJPY: Forex - USD/JPY weekly outlook: June 17 - 21
Monday, June 17
Japan is to release official data on
tertiary industry activity, an important indicator of economic health.
Australia is to produce a report on new motor vehicle sales, a leading
indicator of consumer confidence.
Tuesday, June 18The U.S. is to release official data on building permits, housing starts and consumer price inflation. Meanwhile,
finance ministers and central bankers from the G8 group are to hold the
second day of a two day summit in Northern Ireland.
Wednesday, June 19
Japan is to release official data on the trade balance, the difference in value between imports and exports. Later
Wednesday, the Federal Reserve is to announce its federal funds rate
and publish its rate statement. The statement is to be followed by a
closely watched press conference with Chairman Ben Bernanke. The U.S.
central bank is also to release its quarterly report on economic and
Thursday, June 20The U.S. is to release the weekly
government report on initial jobless claims, in addition to data on
existing home sales and the Philly Fed manufacturing index.
Friday, June 21BoJ
Governor Haruhiko Kuroda is to speak; his comments will be closely
watched for indications of the future direction of monetary policy.
Next trading week is coming ... so - it is some more to read about fundamental news - Dollar Outlook Next Week Hinges on Bernanke -
The U.S. is to release the weekly government report on initial jobless claims, in addition to data on existing home sales and the Philly Fed manufacturing index.
As to USDCAD for coming trading week so read this thread.
Just about Tertiary Index - it was released at 23:50 yesterday night GMT time (or at 01:50 am today). If Actual data > forecasts - it is good for currency (for JPY in our case).
Japan Tertiary Industry Index Flat In April :
An index measuring tertiary industry activity in Japan was flat on
month in April, the Ministry of Economy, Trade and Industry said on
Monday, standing at a seasonally adjusted 99.7. That missed
forecasts for a gain of 0.2 percent following the upwardly revised
decline of 0.9 percent in March (originally -1.3 percent).
From Forbes : Celebrate Ben Bernanke, Buy A Few Dividend Stocks
Ben Bernanke, who deserves the Nobel prize for helping the U.S. to avoid
a deep deflationary depression, cannot catch a break. First, he is
demonized for for his quantitative easing program that naysayers
predicted would sooner or later destroy the value of the American
dollar, as well as the double whammy of creating an horrific
hyper-inflation. Unrestrained QE, the magnificent addition of trillions
in monetary reserves was supposed to climax with the end of the world.